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A Tiny Boat of Sense in a Sea of Stupidity

4 Sep, 2003 By: Thomas K. Arnold

Too little, too late?

I read with interest the announcement that Universal Music Group is drastically cutting CD prices to $12.98 from as much as $18.98. I've never understood the high price of CDs, particularly after DVDs rolled around. As a consumer, I'll be damned if I'll buy the new flavor-of-the-week album for twice what it would cost me to buy two great old movies. And apparently lots of other consumers feel the same way, because since DVD's launch in 1997, CD sales have taken a dramatic tumble.

I'm not saying the two are connected, but you have to admit, the job of getting consumers to buy CDs when they can buy entire movies for less is a formidable challenge — particularly with the lure of free downloading.

Universal is the biggest of the five record giants, and I'm sure the others will follow.

But will it work? For years, the record companies have been a study in stupidity, and I can't help but wonder if their attempts to revive a dying business will be an exercise in futility.

True, it's a step in the right direction — namely, to make CDs more appealing to consumers — but it comes after so many missteps I question whether it will work.

For starters, the pricing structure of music should have been modified a long time ago. Maybe in the days when there were true superstars with staying power it made sense to keep catalog prices high while discounting new releases, but in video it's always worked the other way — prices are cut throughout the movie's life cycle until it ends up selling for less than $10 at Wal-Mart.

The keen minds in music, however, figured it made more sense to maintain the status quo, somehow figuring the same guy who didn't mind spending $20 for The Beatles' Sgt. Pepper wouldn't blink at shelling out the same amount for an eight-year-old Gin Blossoms (who?) album.

For another, why in the #$@%^* did the music companies kill off the single? True, with the CD era the two-sided vinyl single that sold for less than a buck became a mini-sampler with three or four songs selling for $5. But, still, it was a cheaper alternative to a full album — and it did let consumers try out new music before investing $20 in the whole enchilada.

Unfortunately for the labels, the murder of the single coincided with the emergence of file-swapping. Gee, buy a whole album of untried music for $20 or sample a song for free — that's a no brainer. When consumers saw how easy it was to download a song, why not two, three, 10 or 100? The record companies had deprived them of the chance to effectively try before they buy — so to hell with them, why buy at all?

And then, what came next — ah, yes, the glorious, illustrious DVD-Audio. You can almost hear record company executives saying, “People aren't buying our CDs anymore? I know — let's double the price, call it DVD and then not give them any of the extras they're accustomed to from DVD-Video.”

If that wasn't enough to deprive DVD-Audio of any real chance it had to catch on, the record companies then embarked on a ruinous format war, with the development of the Super CD.

Oh yeah — and nothing was compatible with anything else. Hell, you can't even get proper DVD-Audio sound out of a DVD player—unless you buy a special one that's tailored to DVD-Audio (not to be confused with DVD-Video) specs.

For the past two or three years, CD sales have continued to decline, and this time the record companies did nothing. Well, that's not entirely true — they did start releasing DVD-Videos of concerts, which happened to cost a few dollars less than the CD of the same music, sans videos.

They also started using DVD-Video as a promotional item, an add-on to CDs. They saw it as a savvy marketing tool, but to me it made it even more apparent to consumers that they were getting ripped off. That's right —t ease me with a DVD-Video of one song, then charge me full price for an audio-only CD.

So what's next? You got me. Slashing prices sounds like a good idea, and if it's done broadly enough, across all fields and by all companies, it could rekindle sales.

But knowing the record companies, I fully expect them to find some way to muck the whole thing up.

Again.

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